Culp Cuts Q4 Outlook As COVID-19 Lockdown Affects China Operations

  • Culp Inc CULP said it is lowering its fourth-quarter FY22 expectations due to COVID-related shutdowns affecting its China operations and further weakness in domestic mattress industry sales.
  • Culp sees Q4 net sales to be significantly down (prior view: slightly lower) from Q4 FY21.
  • It expects an operating loss of $(6.5) million - $(7.5) million in the quarter.
  • The company has also executed a non-binding term sheet with the lender of its existing domestic credit facility for a revolving credit facility of up to $40 million.
  • This proposed Credit Facility will replace the company's existing unsecured credit facility, which is set to expire in August 2022.
  • The company expects to end the fourth quarter with approximately $10 million in cash and no outstanding borrowings.
  • Price Action: CULP shares closed down by 17.4% at $6.28 in after-hours trading on Monday.

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